COAL OF AFRICA – REPORT FOR THE QUARTER ENDED 31 DECEMBER 2010

COAL OF AFRICA – REPORT FOR THE QUARTER ENDED 31 DECEMBER 2010

Coal of Africa Limited provides its operational report for the quarter ended 31 December 2010. A copy of this report is available on the Company's website, www.coalofafrica.com

Highlights

  • The Company entered into an agreement with Rio Tinto to acquire the Chapudi Coal Project and several other coal exploration properties (“Related Exploration Properties”) for US$75 million.
  • The Chapudi Coal Project has an estimated 1.040 million tonne (“Mt”) resource (of which 90Mt is Measured, 220Mt Indicated and 730Mt Inferred, as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Minerals Resources and Ore Reserves’ (“JORC Code”)) and is contiguous with CoAL’s Makhado coking coal Project (“Makhado Project”).
  • Substantial progress made on the Definitive Feasibility Study (“DFS”) for the Makhado Project.
  • Extraction of over 269,300 bank cubic metres (“bcm”) of material for the Makhado Project bulk sample during the quarter.
  • 954,915 tonnes of run of mine (“ROM”) and 686,403 tonnes of export quality coal produced at the Woestalleen and Mooiplaats thermal collieries.
  • Cash balance at the end of the quarter of A$23 million.

 
Commenting on the results today, John Wallington, Chief Executive Officer of CoAL said: “The Company continues to work closely with various government departments to resolve the challenges at the Vele Colliery. Interactions to date included a constructive site visit by the United Nations Educational Scientific and Cultural Organization (“UNESCO”) and senior government officials from the Departments of Mineral Resources (“DMR”) and Environmental Affairs (“DEA”), to assess the co-existence of the Vele Colliery with the Mapungupwe World Heritage Site. Whilst the Company awaits UNESCO’s feedback, management remains confident that any issues identified can be satisfactorily resolved allowing for the commencement of operations at the colliery in early 2011.”
 
“CoAL has committed itself to complying with enacted as well as any future legislative requirements. While seasonal rainfall reduced production at our Woestalleen mines, production at the Mooiplaats thermal coal project (“Mooiplaats Colliery”) increased slightly and further development work and the commissioning of an additional section is expected to result in a steady rise in production. The acquisition of Rio Tinto’s tenements in the vicinity of CoAL’s Makhado Project will position the Company as the majority resource owner in South Africa’s only known coking coal area, in an environment of rising global coal prices.”

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